By Tiernan Ray

Here are some things going on this morning in your world of tech:

Shares of International Business Machines (IBM) are up 45 cents, at $182.70, after the company this morning agreed to sell its server business that uses Intel’s (INTC) “x86” chirps to Lenovo Group (0992HK) for $2.3 billion, including $2 billion in cash and the rest in Lenovo stock. IBM will retain the other parts of its hardware business, such as mainframes. Hardware, of course, was the stand-out disaster of the company’s Q4 earnings report on Tuesday.

J.P. Morgan’s Mark Moskowitz, who has a Neutral rating on IBM shares, writes that the sales “does not change our view on the stock, and if anything, underscores how IBM’s 2014 EPS profile increasingly is being propped up by non-operational items, which is not good for the quality of the earnings profile.”

Shares of Netflix (NFLX) are up $51.26, or over 15%, at $384.99, adding to last night’s gains, after the company beat Street expectations for Q4, on subscriber gains both at home and in its international streaming business.

There appears to be one ratings change on the stock, an upgrade from Hold to Buy at boutique firm CRT Capital. Other than that, there are several price target increases.

RBC Capital’s Mark Mahaney reiterates an Outperform rating, and raises his price target to $500 from $440, writing that the reason the stock popped was not just subscriber additions, but also the implication a 30% operating profit margin in the domestic business in future, and evidence the company has pricing power.

“Despite dramatically outperforming in ’13, we believe NFLX can continue to outperform in ’14. Fundamentals are getting stronger,” writes Mahaney.

On the skeptical side, Brian Fitzgerald with Jefferies & Co. reiterated an Underperform rating, though he raised his price target to $250 from $215. His focus is the company’s plan to raise $400 million in debt this quarter, bringing its total leverage to $900 million. Fitzgerald writes the company will have a total of $10 billion in liabilities: “Following the new debt raise, Netflix will have $900MM in long-term debt. The company also has $1.8B of content liabilities on the balance sheet, and an additional $7.3B of off-balance-sheet content liabilities.”

Does anyone think Carl Icahn’s right that eBay (EBAY) should split off its PayPal business? eBay disclosed yesterday afternoon, in reporting Q4 revenue below expectations, that Icahn has proposed a spin-out of the payments unit.

Doug Anmuth of J.P. Morgan, who has an Overweight rating on eBay shares, this morning raised his price target to $65 from $62, writing “a potential spin-off may seem more feasible now than a few years ago as the Marketplaces business has returned to decent growth levels; However, we believe the longer-term performance of Marketplaces and Payments will likely be stronger within a combined company and there are meaningful synergies between the businesses around customer acquisition, data, and capital sourcing that may be difficult to achieve through commercial agreements.”

Jun Zhang of Wedge Partners, who has been making various forecast about Apple’s (AAPL) iPhone as it went on sale at China Mobile (CHL) this month, today opines that first-weekend sales, starting last Friday, came in at only 250,000 to 300,000 units, below what he thought would be 400,000 to 500,000 units.

He bases that on conversations with “China Mobile’s local stores, handset distributors and retailers,” he writes. Zhang thinks sales will pick up with the arrival of an “iPhone 6” later this year.

Apple, of course, reports official fiscal Q1 results Monday, January 27th, which may bring some color on initial numbers.

In other Apple news, The Wall Street Journal’s Lorraine Luk, Eva Dou and Daisuke Wakabayashithis morning write that Apple is planning two larger models of the iPhone later this year, citing multiple unnamed sources. One version is expected to have a 4-and-a-half-inch screen, the other a 5-inch screen. The devices are expected in the second half of this year.

Shares of Nokia (NOK) are down 72 cents, or over 9%, at $6.98, after the company this morning reported Q4 revenue of €3.48 billion, and EPS of €0.08, excluding some costs. Consensus for this report was somewhat skewed by the sale of the company’s handset business to Microsoft (MSFT), which some firms still had in their estimates.

But it seems the revenue number was in line with some models, while the profit was below some estimates, especially in the “NSN” cellular network equipment business.

The big disappointment, writes Wells Fargo’s Maynard Um, who has a Market Perform rating on the shares, was the projection for $600 million in royalties from Nokia’s patent portfolio this year. “

“While management’s prior guidance had been for a EUR500MM run rate, we believe investors were already embedding a higher run rate (based on our model, Nokia has not had a quarter at an annualized EUR500MM run rate),” writes Um.

“We were forecasting revenue of EUR617MM and believe investors’ bull theses has been for upside above our forecast when including Microsoft and potential future opportunities.

Evercore Partners’s Mark McKechnie, who has an Equal Weight rating on the shares, and a $7 price target, writes that he was “surprised” by the sales of €3.1 billion in the infrastructure division, which were up 20% from the prior quarter, notably with strength in China.

Speaking of Microsoft, the stock is down 11 cents at $35.82 in advance of the company’s fiscal Q2 earning report this afternoon, after the closing bell. Deutsche Bank late yesterday transferred coverage of the stock from Nandan Amladi to Karl Keirstead, who upgrades the tock to a Buy from Hold, writing that “Microsoft is, in our view, still not getting enough credit for its large and stable enterprise software business, which we believe is well-positioned as overall IT spending improves and the spending mix shifts to cheaper solutions.” He also thinks Microsoft is “finally making the right moves to pivot to cloud computing” and that Xbox One sales may lead to upside in the hardware business.

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There are 6 comments

JANUARY 23, 2014 1:58 P.M.

Clint Taurus wrote:

Jun Zhang of Wedge Partners must be giving himself wedgies. His underwear must be so tight he can't get anything right.

JANUARY 23, 2014 2:55 P.M.

major langer wrote:

art left out 100k unlocked phones sold
300 on contrct
100 unlocked 400 which was his ESTIMATE.
NOT FACT.
ALL RUMOR AND INNUENDO.
Geeze

JANUARY 23, 2014 2:56 P.M.

Anonymous wrote:

Wow! You guys are really out of control! I think we need to create an agency that investigates false reporting by media organizations like Barrons.

JANUARY 23, 2014 6:38 P.M.

TruthSeeker wrote:

Just like I've been saying all along, the Chinese are not going to be entranced by apple's fashion phones and tablets. They want real value for their money not wildly overpriced toys, and that's why apple's China sales have been vastly under what some nuts in the U.S. thought they would be. U.S. analysts must have been basing their predictions on what their teenage daughters told them to predict, and ignoring apple's crashing market share.

JANUARY 23, 2014 7:04 P.M.

Chang wrote:

Wedge Partners has only 6 employees. That Zhang guy keeps releasing false information. I was really surprised that Barron which supposed to be reliable newspaper keeps citing these nonsense, then it goes to Yahoo financial which is going downhill daily.

JANUARY 23, 2014 7:41 P.M.

@ TruthSeeker wrote:

China will not always be poor. Ask Bill Gates about that. And, Apple has done far far better than anyone ever expected them to do in Greater China. Hmm. So if not today. Then tomorrow. You've got to learn to think Chinese man. China has been around, you know, for 7,500 years. 7,500 years. Can you dig it? So. Chill dude. Chill.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.